As a sign that vid game giant Electronic Arts is a major player in investor’s minds, Wall Street punished the company’s stock price yesterday even as EA announced record results.
For its fiscal third quarter ending Dec. 31, 2003 EA posted a quarterly profit of $392.3 million, up from $250.2 million, on revenue of $1.48 billion, up 20% from a year ago. But because EA also forecast a dip in fourth quarter earnings below expectations, 17- to 20 cents per-share, EA’s stock fell 1.8% on Tuesday to $48.53 and then continued to fall several additional percentage points in after-hours trading. Wall Street analysts had expected earnings of around 25′ per-share.
Overall, EA’s business remains strong. Fueled by strong sales of such titles as Need for Speed Underground, The Lord of the Rings: The Return of the King and Madden NFL Football 2004, the company’s third quarter net income was up 57% over the same quarter a year before to $392 million. That represented $1.26 per share up from $.85 per share in the third-quarter of 2002.
As a result of the exploding vid game business overseas, EA saw its strongest growth in Europe, where net revenue rose 40% to $658 million. North American net revenue was up 8% at $753 million, while in Japan it fell 29% to just $21 million.
EA competitor Atari also failed to meet Wall Street expectations yesterday. Atari said its fourth-quarter performance would be worse than expected, with net revenue of $190 million and net income between $20.5 million and $22.5 million. Atari had previously provided guidance of net income between $28 million and $36 million on net revenue between $215 million and $235 million. Atari stock fell 20% on the news to $3.40. The company has announced that the ship date for its heavily promoted Driv3r, which features the voices of Michelle Rodriguez and Michael Madsen has been pushed back from late March to June 1st.